Thayer Delays Committee Vote on Gaming Bill

Saying his bill for a constitutional amendment on expanded gambling in the state is gaining support from some members of the Kentucky horse industry, Republican Sen. Damon Thayer put action on the bill on hold Jan. 13.

Thayer said he was confident he had enough support on the Committee on State and Local Government, which he chairs, to approve the legislation and send it on the full Senate for consideration. However, based on the positive feedback he has received the past several days from a handful of horse industry participants, Thayer said he believes delaying consideration of the bill could provide more time for him to build a consensus of support.

“I am getting a lot of feedback from people in the horse industry that they are disappointed in the horse industry leadership for opposing my bill," Thayer said. "They realize it is the best chance for an expanded gambling bill to pass this session. This just happened in the last day or so. So I have decided to give the bill a little bit more time to perhaps gain some more bipartisan support.

"I decided I wanted to see if there’s anyone else willing to come to the table. We’re going to give it a little more time. Let it percolate a little bit.”

The measure could be heard in the committee later in January.

Thayer said the handful of owners and breeders who had contacted him directly and indirectly before the Jan. 13 committee meeting expressed frustration with the opposition his bill was generating from industry leadership, particularly the Kentucky Thoroughbred Association and the Kentucky Equine Education Project. He declined to name those who had been in touch with him.

“It’s interesting that horsemen who are not in the leadership of KEEP or the KTA have contacted me and said, 'We think your bill is the best way forward and wish that industry leaders would reverse their position' of opposition to Senate Bill 21,” Thayer said. “I did sense some frustration on their part that maybe things have gotten away from what’s right for the horse industry and more of a political stance -- a slots-by-statute-at-all-costs and damn-the-torpedoes approach that seems to be prevalent within the horse industry.”

Thayer’s bill would permit video lottery terminals in up to seven counties that have racetracks, but the tracks would have to compete for the licenses. The legislation also requires a statewide vote on a constitutional amendment allowing VLTs, and a local option vote in the counties where the alternative gaming would be conducted.

The measure calls for the state to get 50% of gross revenue, racetracks 25%, and purses and marketing programs 25%. The purses and breed development programs are guarnateed a minimum of $100 million, as well as half of the up-front license fees under a competitive bidding process.

Representatives of the horse industry that have pushed for VLTs exclusively at the racetracks have said Thayer’s proposal has problems, particularly because the tracks would not have a monopoly on alternative gaming; the revenue splits are not workable; and the constitutional amendment process would take too long to offer the immediate financial boost the horse industry needs.

Though it is not expected be filed until late January, the VLT legislation that would have the horse industry’s support is expected to be offered by Democratic House Speaker Greg Stumbo. Stumbo’s proposed legislation, similar to a bill passed by the House during a special session in 2009 before it was killed in a Senate committee, would grant the racetracks exclusive rights to offer VLTs under authority of the Kentucky Lottery Corp.

Stumbo said it would be futile for the Democratic majority in the House to even consider the bill, given the prospect that it would not make it out of the Senate, where it is opposed by Republican Senate President David Williams.

Following the committee meeeting Jan. 13, Thayer said he had not been in touch with leaders of the KTA or KEEP in recent weeks concerning his bill. He has, however, met recently with the presidents of two Kentucky racetracks to discuss their opposition to the bill.

Thayer did not disclose details of the meeting with Churchill Downs president Kevin Flanery and Turfway Park president Robert Elliston. Thayer labeled the meeting, held at the request of the track executives at Thayer's Senate office in Frankfort, as “very cordial.”

“The racetracks have told me they want exclusivity at the racetracks (for VLTs)," Thayer said. "As this issue rose to the forefront over the past year, there was an equally vocal group that said, ‘Why should the racetracks be guaranteed a monopoly on this?' These (VLT) licenses are something of value to the people of Kentucky. License fees are very valuable, and a competitive-bidding process is likely to result in higher license fees being paid. At least that’s the theory behind it. But it is a debatable point.”

Thayer said his bill gained traction from some in the horse industry after he discussed it during the “Equine Forum” program that aired on the Lexington-based Horse Racing Radio Network.

While those that have been in touch with him may or may not be members of KEEP or the KTA, Thayer said they were not in leadership positions with either organization. He said they also expressed their views as individuals whose livelihoods depend upon the horse industry.

“They have heard me in the media and on the radio and say, ‘Your plan is reasonable. We may not agree with every point, but it is the only thing out there and it is a reasonable approach.' They did not represent themselves to me as members of any alphabet soup group. They represented themselves as horsemen – owners and breeders – who are concerned about the situation, who are going to stay in the state of Kentucky, but are having a harder time making their operations work.”

Rather than being viewed as a negative, Thayer said the requirement for a statewide referendum could be embraced by the horse industry as a way to educate the general public on problems facing the industry.

“I think a couple of years ago, if you had put something on the ballot like this, it would have failed,” Thayer said. “It is probably a tossup in a statewide vote. The horse industry has made progress in persuading public opinion that (it is) at a competitive disadvantage (from other states offering alternative gaming). I don't know why they are afraid of a statewide vote. I think it is a great opportunity for the horse industry to make its case in a broad forum that would be heavily covered by the media.”

Concerns that other gaming interests would be able to outspend the horse industry in an expensive lobbying effort should also not be a deterrent to his bill, Thayer said. He cited a recent special state Senate election as an example of how money does not always prevail.

In that election for the seat formerly held by Republican Senate Majority Leader Dan Kelly, Democratic candidate Jody Haydon and his party spent more than $890,000, compared with spending by Republican Jimmy Higdon and his party of $328,000, according to the Louisville Courier-Journal. Kelly was appointed to a circuit judgeship by Democratic Gov. Steve Beshear. Higdon won the special election, giving Republicans a 20-17 edge in the Senate, with one Independent.

“Sometimes the power of ideas and debate and argument can win out over money," Thayer said. "If this issue gets on the ballot, those both for and against it are going to have an opportunity to talk about this issue. I don't think they should be afraid of the money. Sometimes you just have to have confidence in the power of your idea."

In an additional effort to curry favor for his bill from the horse industry, Thayer said he may draft his “enabling legislation,” providing greater details of how it could benefit breeders and purses at racetracks.

“Enabling legislation would show horsemen how much would go into purses and marketing," he said.

Voting was also delayed before the committee Jan. 13 on another gaming bill filed by Williams that would require amending the constitution for any expansion of gambling. Thayer said Williams requested the vote be canceled and did not give a reason.